Year-end Report, 31 December 2021

“Major earnings improvement, stronger financial position and increased scope for acquisitions”
Andreas Morfiadakis, CEO

October – December

• Revenue for the quarter was SEK 115.1 million (55.5), up 107 per cent year-on-year.
• The Group’s net operating income was SEK 62.9 million (28.9), up 118 per cent over the year-earlier period.
• Profit from property management for the quarter was SEK 22.7 million (12.0), up 89 per cent over the year-earlier period.
• Changes in the value of investment properties amounted to SEK 303.7 million (148.3) and changes in the value of derivatives to SEK 4.4 million (-1.7).
• Profit for the quarter totalled SEK 251.7 million (124.4), corresponding to SEK 2.19 per share (1.84) before dilution.
• The loan-to-value ratio on 31 December was 41.6 per cent.

January - December

• Revenue for the period was SEK 344.2 million (178.8), up 93 per cent over the year-earlier period.
• The Group’s net operating income for the period was SEK 189.9 million (96.8), up 96 per cent over the year-earlier period.
• Profit from property management was SEK 76.4 million (35.7), up 114 per cent over the year-earlier period.
• Changes in the value of investment properties amounted to SEK 737.3 million (413.0) and changes in the value of derivatives to SEK 10.9 million (-7.5).
• Profit for the period totalled SEK 640.5 million (345.2), corresponding to SEK 7.75 per share (5.32) before dilution.
• EPRA Net Reinstatement Value (NRV) per share totalled SEK 33.92 (23.70), up 45 per cent year-on-year.
• The Board has proposed to the Annual General Meeting (AGM) that no dividend be paid for the 2021 financial year.

Significant events after the end of the period

• Acquisition of 126 rental apartments in Umeå with an underlying property value of SEK 175 million and total area of approximately 8,700 square metres. The acquisition was financed by bank loans and the Group’s own funds.
• Land allocation in the Anderstorg district awarded by Skellefteå Municipality. The land allocation includes a completed detailed development plan with approximately 10,000 square metres of GFA where the company will construct about 130 rental apartments.

Comments from CEO Andreas Morfiadakis

KlaraBo’s Class B share was listed on Nasdaq Stockholm’s Main Market in early December 2021. This marked an important milestone in the company’s development. The listing strengthened our growth prospects, broadened our ownership base and provided us with better access to capital markets. The listed also created greater awareness of the company, thereby strengthening our profile in the eyes of our employees, tenants, municipalities, creditors and investors. 

The offering to acquire shares in conjunction with the listing attracted considerable interest among Swedish and international institutions and the general public. The offering was heavily oversubscribed, and a total of 38,000 private individuals and institutions applied to subscribe for shares. As of 31 December, we had just under 6,500 shareholders. We are thrilled and proud of the reception and interest we received and welcome all of our new shareholders.

KlaraBo in brief

A brief introduction for all of our new and future shareholders: KlaraBo acquires, builds, owns and manages attractive housing units. The company was formed in 2017 and is based in Malmö, but we operate across all of Sweden. Our strategy is to acquire existing residential properties and land for new construction in growth regions. Our newly constructed housing units are developed in-house and are designed for a smart use of floor space, which promotes reasonable rents. We mainly build in wood and use a number of basic apartment models, known as base apartments. This enables sustainable and optimal use of resources. Our older portfolio is renovated in conjunction with voluntary vacancies, which contributes to long-term value creation. Given the combination of high demand for housing and the limited supply, we believe we have good prospects to continue creating shareholder value for all new and old shareholders.

Earnings

We are pleased to report another strong quarter, not including listing costs totalling approximately SEK 42 million. Revenue increased 107 per cent to SEK 115.1 million (55.5) compared with the corresponding quarter in the preceding year. This increase was mainly attributable to acquisitions, with the number of investment apartments more than doubling. Net operating income rose 118 per cent to SEK 62.9 million (28.9), primarily driven by value-creating measures in the existing portfolio. Combined, this meant that profit from property management increased 89 per cent to SEK 22.7 million (12.0). The increase in value in the portfolio amounted to SEK 303.7 million, partly driven by investments. During the quarter, we used part of the issue proceeds to repay just over SEK 360 million on all seller financing outstanding, which will reduce the Group’s interest expense by nearly SEK 13 million on an annual basis. This strengthened our cash flow, improved our profit from property management and reduced our average loan margin. At year-end, we had a loan-to-value ratio of 41.6 per cent and an interest-coverage ratio in accordance with our earning capacity of a multiple of 3.45. With a strong balance sheet and improved earning capacity, we have increased our scope for acquisitions and investments.

The quarter also marked a period of intense activity. In addition to the listing process, we welcomed 46 households to our newly constructed, sustainable housing units in Motala in December. KlaraBo environmentally certifies all new construction projects, and this property was our first under our own management to receive Miljöbyggnad Silver environmental certification. We acquired a small project property in central Malmö that, following customary ROT renovations, will be converted into 30 small apartments. We decided to create 16 new attic apartments in Tågaborg, Helsingborg and acquired 126 rental apartments in Umeå at the start of this year.

So far, the start of this year has been marked by growing uncertainty regarding the geopolitical situation as well as inflation, exchange rates and interest rates. This could have an impact on material and timber prices and result in logistics challenges, but it is too early to say whether these uncertainties will have a material impact on our operations.

Outlook

Although the world is facing growing uncertainty, we continue to have a solid base, with stable cash flows from the approximately 5,500 fully rented apartments we manage and a loan-to-value ratio of 45 per cent. This will create scope for more value-creating transactions going forward.

Andreas Morfiadakis, CEO of KlaraBo

Teleconference
KlaraBo’s CEO Andreas Morfiadakis and CFO Jenny Appenrodt will present the Year-end Report through a webcast presentation and teleconference at 11:00 a.m. (CET) on Wednesday, 16 February. The presentation will be held in English.

To participate in the teleconference, call: +46 8 505 583 69
For a webcast of the conference go to: https://tv.streamfabriken.com/klarabo-q4-2021

This information is information that KlaraBo Sverige AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, at 08.00 CET on 16 February 2022.

For more information:
Andreas Morfiadakis, CEO KlaraBo
andreas.morfiadakis@klarabo.se
+46 76 133 16 61

About KlaraBo
KlaraBo is a real estate company that acquires, builds, owns and manages attractive residential properties. The company was founded in 2017 and operates throughout the country. The strategy is to acquire existing residential properties as well as land for new construction in regions with population growth and a strong labour market. Our newly constructed apartments are developed in-house and space efficient, which contribute to reasonable rents. Both apartments and buildings are designed in collaboration with the municipality to fit local needs. With wood as the main building material, the new construction holds a high environmental standard. KlaraBo is a long-term property owner. KlaraBo is listed on Nasdaq Stockholm and is traded under the ticker KLARA B.